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India happy, now Cuba the threat
Although India, a staunch opposer to a deal at the ninth World Trade Organization (WTO) Ministerial Meeting, finally agreed to a compromise on Friday, trade officials remained wary as to whether they could hammer out a historic global trade deal, since the WTOâs creation in 1995
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lthough India, a staunch opposer to a deal at the ninth World Trade Organization (WTO) Ministerial Meeting, finally agreed to a compromise on Friday, trade officials remained wary as to whether they could hammer out a historic global trade deal, since the WTO's creation in 1995.
While expectations were high on reaching the finish line during the lengthy negotiations, which had begun last year, a last-minute drawback has threatened the entire undertaking.
A draft deal, set to cover new trade reform for trade facilitation, agriculture subsidies and development packages for least-developed countries (LDCs), was suspended following opposition from Cuba.
Because decisions at the WTO cannot be reached without the consent of all member countries, Cuba's stance was 'make or break ' for the future of the global trade body.
Cuba's Deputy Foreign Trade Minister, Ileana Nunez Mordoche, refused to come on board when WTO director general Roberto Azevedo distributed the text of the deal to the delegation heads, according to WTO spokesman Keith Rockwell.
'They want some language that will pull back the US embargo. That is very difficult to do,' he said. 'This is not a place where we can resolve this,' Rockwell told reporters.
The US enacted the embargo in 1960, after Cuba nationalized properties belonging to US citizens and corporations; later upgrading to a near-total embargo in 1962.
A number of countries, including those in the European Union, have long voiced their concerns over the embargo as it also impacted foreign firms trading with Cuba.
The United Nations General Assembly recently urged the US to lift its embargo against Cuba.
At the time of writing, the WTO was due to hold another plenary session at 3 a.m. on Saturday to discuss Cuba's issues.
Cuba rejected the draft text of the trade facilitation, which should apply non-discriminatory measures.
'Cuba doesn't want to accept the trade facilitation text. The problem has emerged again just today [Friday],' said an Indonesian trade
official.
This challenge to the US' economic embargo on Cuba was one of the unsettled issues during the latest talks for a draft text in Geneva at the end of last month, but greater attention had been paid to the key stumbling block, a public stockholding proposal by the G33, of which India was the initiator.
Earlier in the day, Bayu Krisnamurthi, who is also heading the Indonesian delegation, said the negotiations were 'inching toward the finish line', with remaining issues mostly being resolved.
'From Indonesia's viewpoint, it [the finish line] is the whole Bali package,' he said.
A deal materialized after lengthy consultations hosted by Azevedo, the ministerial conference chairman, Trade Minister Gita Wirjawan and key officials from India and the US.
The talks throughout the day overcame the most critical pending issue ' crop stockpiling ' which has already caused a row between India and the US.
'In the interim, until a permanent solution is found, and provided that the conditions set out below are met, members shall refrain from challenging through the WTO Dispute Settlement Mechanism,' said the revised text of the proposal on public stockholding, submitted by Azevedo to the full membership on Friday night.
Indian Commerce and Industry Minister Anand Sharma said India endorsed the new text, achieved with 'mature understanding'.
'For the first time since the launch of the Doha Round negotiations, there is a decision being made. This is the first time that the global trade round of talks has been dedicated to the development agenda,' he said referring to the new text.
'It is a victory for the WTO and for the global community to have arrived at a mature decision,' said Sharma, whose stance had initially held up the WTO agreement.
'We are more than happy. It's a great day. It's a historic day.'
Titik Anas, a senior researcher at the Centre for Strategic and International Studies, said the achievement of a Bali package would be a success for the global trade governing body.
'Despite the difficulties in reaching an agreement on the package, WTO members have managed to come very close to sealing a deal in Bali. [If they succeed], it will bring back trust to the multilateral trading system and make room for improving commitments in other areas,' she said.
A failure by the 160 WTO members to agree a deal will erode confidence in the WTO's capacity to foster negotiations for multilateral trade policies. The deadlock will also trigger a rise in bilateral and regional trade agreements that are feared could turn into a veritable mélange of conflicting trade rules.
Points agreed in the deal
Agriculture:
1. Developing countries permitted to maintain public food stockpiling for food security.
2. Members agree to negotiate agreement on a permanent solution applicable to all developing members on the food stockpiling issue for adoption by the 11th Ministerial Meeting, while an interim solution remains in place.
3. Until a permanent solution is found, members shall refrain from challenging, through the WTO Dispute Settlement Mechanism, support provided for traditional staple food crops for food security purposes.
Trade facilitation:
1. No fees or charges will be imposed in respect of transit, except charges for transportation or those commensurate with
administrative expenses entailed with transit or with the cost of services rendered.
2. Members shall endeavor to establish or maintain a single window, enabling traders to submit documentation and/or data requirements for importation, exportation or transit of goods through a single entry point to the participating authorities.
3. Each member shall apply common customs procedures and uniform documentation requirements for release and clearance of goods throughout its territory.
4. Donor members agree to facilitate the provision of assistance and support for capacity building to developing and least-developed country members on mutually agreed terms, either bilaterally or through the appropriate international organizations.
On least-developed countries (LDCs):
1. Developed and developing countries shall seek to provide duty-free and quota-free market access to at least 97 percent of products originating from LDCs.
Source: World Trade Organization, The Jakarta Post
Possible impacts of WTO deal
On agriculture
Indonesia
'¢ Indonesia permitted to maintain public stockpiles as part of its food security program until a permanent solution is agreed
'¢ Indonesia has opportunity for increased agriculture production
'¢ Indonesia faces reduced domestic competition from developed countries
World
'¢ Improvement in information sharing and monitoring
On trade facilitation
Indonesia
'¢ Increased imports
'¢ Local industries face tighter competition from imported goods
World
'¢ Greater trade access
'¢ Shared financial burdens between developed and developing countries
'¢ Higher participation by small and medium enterprises
'¢ Cooperation among border agencies
'¢ Potential loss of tax revenues due to freedom of transit
